SAP Lease Administration By Nakisa v 4.0. Multi-GAAP Configuration
This is a new series of blog topics explaining architecture, existing functionalities, compatibility, troubleshooting and configuration of SAP Lease Administration by Nakisa v4.0 (including Service Pack 1,2,3 and 4).
list of the most wanted topics which will be covered;
- SAP Lease Administration by Nakisa 4.0. Architecture.
- SAP Lease Administration by Nakisa 4.0 Connected vs Disconnected mode.
- Multi-GAAP support and configuration. How to comply with ACS842 requirement to disclose operating lease separately than finance leases?
- How to troubleshoot parallel currency configuration?
- How SAP Lease Administration by Nakisa helps customers to comply with the new GDPR requirements?
- Parallel currency support and configuration in SAP Lease Administration by Nakisa 4.0.
- Reference currency support
- Alternative exchange rate type support
- Direct or indirect rates and translation factors
- Group currency support: Liability and Asset postings
- Cost objects support such as Profit center, WBS, Internal orders, Business area, Functional area etc. How to use different objects for Liability and Asset related postings?
- Parallel currency and Asset depreciation calculation as per ASC842. How to post group currency in SAP AA from SAP Lease Administration by Nakisa 4.0?
SAP Lease Administration by Nakisa 4.0. Architecture.
SAP Lease Administration by Nakisa 4.0 was designed to centralize and manage lease contracts acting as a sub-ledger.
The solution is covering the following core functionalities:
- Lease contract data abstraction,
- Lease Workflow,
- Liability and Asset amortization schedules calculation,
- Creates and stores transaction data as per IFRS16 and ASC842,
- Events management and Reporting.
- Data Model
To address one of the biggest challenges on the market in terms of equipment lease management the data model of the solution was designed to support:
- Master Lease Agreements (MLA) (umbrella agreement which contains only high level information of what was agreed between the parties (lessor and lessee). The information included in MLA is not sufficient to be used for finance calculations in regards of Liability amortization or Asset depreciation schedules. One MLA can have multiple contracts linked.
- Contract. It is an agreement stipulating terms and conditions which will be in force in terms of leased units. It has the entire information necessary to calculate liability amortization schedules and asset depreciation schedules. One contract can have multiple lease components linked to it.
- Lease component. It contains header information such as: quantity, unit of measures, unit types etc. Existing Financing terms and conditions which are known during contract inception, no-matter user is not reasonably certain for their exercise are created at this level. One lease component can have multiple Activation groups linked.
- Activation group. The core object in the solution. It combines units which have the same characteristics i.e. laptops, cars, airplanes etc. Liability schedule and Asset depreciation schedule are calculated at the Activation group level. All finance information necessary for calculations is consolidated at Activation group level. One group can have many lease units linked.
- Lease Unit. At this level the system provide link with asset id as well as all master data properties required in terms of cost objects, inventory classification etc.
- Sub-unit. This is the lowest level linked to an asset id.
Along with data model SAP Lease Administration by Nakisa 4.0 provides hierarchy structure and relationships in order to classify contracts based upon different business characteristics and specifics such as: geographical, business lines, departments, groups etc.
SAP Lease Administration by Nakisa 4.0 hierarchy:
- Lease Area – consolidate leases which belongs to the same area of business or region.
- Business unit – sub-division element used to describe line of business enabled in the specific lease area
- Company code – represents legal entity
- Lease department – hierarchy element defining specific stream within the company
- Lease group – defines the lowest hierarchical level, usually it follows the asset classification, i.e. real estate, equipment etc.
- System layers
As per design the solution provides three logical layers:
- Business layer. It is responsible for all business operations such as: data collection, calculations, workflow, postings etc.
- Middle layer (data persistence). This is staging area where all objects are stored such as: internal objects, external objects, relationships etc.
- Integration layer. It provides different functional adapters which connect the application to multiple systems.
SAP Lease Administration by Nakisa 4.0 was designed and architecture splitting the available architecture layers and giving independence to business layer in order to be able to perform all operations with minimum to no dependency from integration layer.
In order to act as a sub-ledger for leases the solution stores all data internally in a local DB, including master data and transaction data.